Post by
retiredcf on Feb 02, 2023 9:13am
CIBC
Have a US$46.00 target. GLTA
EQUITY RESEARCH
February 2, 2023 Flash Research
BROOKFIELD INFRASTRUCTURE
PARTNERS L.P.
Q4/22 First Look: Solid Results; Distribution Increased 6%
Strong Operational Outlook: BIP reported an in-line quarter, including
FFO/unit of $0.72, in line with our estimate of $0.71 and consensus of $0.72,
an increase of 11% Y/Y reflecting the benefits of elevated inflation and
contributions from completed investments. Full-year 2022 FFO/u was also up
12% Y/Y. BIP also achieved 10% organic growth for the 2022 year, above
the high end of the guided 6%-9% targeted organic growth range.
Distribution Increase: BIP increased the quarterly distribution 6% to
$0.3825/u ($1.53/u annualized), slightly above our estimate of a 5.6%
increase to $0.38/u ($1.52/u annualized).
Two Major Acquisitions Closed: subsequent to year end, BIP completed
the privatization of HomeServe and closed on the German tower partnership
with DFMG for a total equity requirement of $1.9B. This should contribute to
strong FFO growth for the 2023 year and allow to company to now focus on
executing on the growth plans for the businesses. Focus is now on public-to-
private transactions. With inflationary tariff increases, recent acquisitions, and
organic growth, FFO/u growth visibility remains strong.
Capital Recycling: BIP has now completed two previously announced sales
for the telecom asset in New Zealand and the electricity transmission asset in
Brazil for a total of $400MM. Two more sales are scheduled for the Indian toll
roads and a 50% interest in a port in Australia for a total net proceeds to BIP
of $260MM. BIP has also launched the next round of asset sales expected to
generate over $2B of net proceeds for the partnership this year. Together,
this should help replenish the capital pipeline. BIP now has $3.4B of
corporate liquidity, well above $2.3B in Q3 prior to closing on asset sales.
Operating Results Generally In Line: The Transport segment
outperformed with reported FFO of $207MM vs. our estimate of $189MM,
benefiting from inflationary tariff increases and higher volumes. The Utilities
segment also outperformed, reporting FFO of $188MM compared to our
estimate of $173MM due to benefits from inflation indexation and improved
contributions from assets. The Midstream segment was in line with
expectations with reported FFO of $205MM compared to our estimate of
$204MM, but was up 12% Y/Y from record natural gas prices late in the year.
Continued progress is being made on the Heartland Petrochemical complex,
with the propane dehydrogenation plant achieving initial production with a
ramp-up to a full run rate contribution by H2/23. The Corporate segment
missed with FFO of ($105MM) vs. our estimate of ($96MM). The Data
Infrastructure segment was a larger miss with reported FFO of $61MM vs.
our $78MM estimate due to foreign exchange impacts on the euro and Indian
rupee.
The company will be hosting a conference call today, February 2, at
9:00 a.m. ET. The dial-in is 1-855-513-1368.